♪ imus in the morning ♪ >> you're not buying, that's what the retailers are telling us. i'm charles payne, stuart is coming back tomorrow, but for today here is the big story. big name retail chains expected to continue a parade of bad news. these are some of them starting with saks which missed this morning, urban outfitters they report after the close. america's not spending money and you're not using your credit card. that's hurting the economy. and more violence in egypt to washington. they're divided over whether the u.s. keeps sending financial aid to that country and president

obama giving no clear guidance either way and here is your monday morning obamacare headline. you know the navigators, costs 67 million to hire. they won't have to go through background checks. "varney & company" is about to begin. ♪ make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you start using active trader pro today. join us at projectluna.com

>> the chaos in egypt escalating over the weekend and now nearly 900 dead people after four days of violence and among them 24 police officers executed by militants in execution style and more calls from lawmakers to cut off that 1.4 billion that the united states gives. and president obama not taking a stand either way and senator john mccain says the u.s. looks bad as a result. >> we have no credibility. we have influence, but when you don't use that influence then you do not have that influence, we could be cutting off the aid, the spare parts and maintenance of these military equipment that

we've given to the egyptians is important to their capabilities. charles: more on egypt later this hour with congressman tom price. now though who obamacare. 67 million dollars in taxpayer money will be spent on the so-called navigators to help people sign up for the right health insurance and get this, they won't have to go through a background check. all that money and no fingerprinting of money and they have access to some of our most personal information and who knows who they are. and retailers have been telling a story to the economy and art laffer is next and see if he or anyone else will use the dreaded c-word today. >> the dow is going to 16,000 roughly by january and then crash in the next few years down to 5800 to 6,000. charles: crash is a four-letter word in the stock market. how much of a crash are you looking at, the worst case scenario. >> gold is probably going up to

1525 and then crash down to at least 700, 740. charles: your target for the dow? 5,000. >> yes. >> by mid 2015, 5,000? that's chaos. that's like, what the heck, we're talking about the united states trouble. >> and the s&p is going to 1740 and go down to about 5 to 600. life's an adventure when you're with her.

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♪ boy, i'm going down, i'm going down ♪ ♪ 'cause you ain't around ♪ >> the markets are going down, but how far, that's the question. the word crash getting thrown around a lot by some of our bears. will they or will we see the markets, the dow at least drop to 15,000 this week, the number we're looking at big time. right now we're a minute away from the opening bell and trey, we've heard nothing concrete from the fed with respect to tapering, but concerns linger for some reason that was the concensus last week, they have the minutes on wednesday, rather, and how important is that going to be? >> it's very important, however, what i want to really caution investors about right now, you know what market scenario worries me more than any? what if the fed, what if the bank of japan. what if the ecb says we're going to continue to buy loads and loads of bonds ap the market

still goes down. that's happening right now. if you look at the treasury market. when they talked about tapering, bonds sold off, they recovered when the fed came out and said, no, no, no a lot of things have to happen before we start tapering and what's happened in the market action. bonds have now taken out that low. you need to liquidate every sovereign bond holding around the world. you do not want to lend any government any money at these rates right now, i think bonds are in serious, serious jeopardy. >> trey, thank you very much. that was direct and believe me we heard you. and as you heard the opening bell was ringing and we expect a little to the down side. off 16, 17 points. we had the worse week of the year last week so a lot of of tension in the air. we've had an earnings report out already. and the saks the latest retailer to continue this bad news. and all right, we want to go to

lauren on the floor of the exchange and we want to see how saks is reacting to that miss. >> you know what, charles, good morning to you first of all. you're talking about saks, it's the same at wal-mart, macy's and the entire spectrum is affected by the economy and that's reporting a net loss of 19.6 million dollars. and they had so much inventory they had to slash prices on their shoes, and their handbags. the accessories are differently. so, generally well, so, saks not sure how the stock opened yet, but disappointing from that retailer. >> some indications, down 15, 16, people should realize they should be acquired and they should have support. but the news as yet another retailer, in this case, a big name retailer missing wal-mart's estimates. there's a report out that j.p. morgan chase may have hired the

children of powerful people he for connections, just makes sense to me, i don't know what you would investigate, but we'll find out later. hey, i've got to start you guys off with two names, you know the names, the hedge funds are selling apple. apple was the stock of the week last week. >> yeah, it was. 10%, best week, and now comfortably above 500 a share. charles: the hedge fund guys are not the masters of the universe, sometimes they're wrong. and netflix, sony is talking to disney, viacom and time warner for streaming the content and a british company coming in. they've got a lot of competitors and how is that reacting? >> netflix is a winner this year. up 180% today, but looking softer this morning. and essentially, sony is trying to convince customers to cut the cord, right? cut the television cord once and

for all. charles: i've got to tell you, that stock to your point has held in there and it's got a lot of competition, but it does hold tough. we'll be back down to you shortly. >> looking forward. charles: all righty. americans are not spending and retailers are feeling the pain and their profits are down and the forecasts have been horrible. saks followed by macy's and wal-mart, nordstrom's all last week and joining the company now is former reagan economic advisor art laffer, for me, i'm looking at the tea leaves and feels like the americans have run out of money. have they? >> i don't think they've run out of money, but run out of government. what is the old song, there's too much months at the edge of my money, something like that. charles: yeah, yeah, well, all right, listen, art. wages went down in july and the real wages in america, they were down. our savings are down to 2%. and you know, either we start charging this stuff up or we can't go out and spend. >> what would you expect given the policies coming out of washington. we've had no change of policies

and raised taxes a lot in january this year by letting the bush tax cuts expire and here we sit with all of this stuff going on. how can you tax prosperity. it doesn't happen. and the obama administration and the congress going along with it are not making any sense. the only hope we have is that they might, you know, we might be able to cut government spending by holding back the funds, but frankly, there is no major change in policies to lead to prosperity, to real prosperity, but there will be, there will be. >> okay, listen, that's the interesting thing. you're talking about the government's inability to stop spending and we're talking about main street not taking the bait. we've heard from tres knippa, and people are not using the credit card rates and not spending over their head. and the only thing they're buying are cars and average is 13 years old. and you think they'd learn their lesson and not spend money they don't have.

>> and trey's advice is correct. do not lend money to government. i mean, just plane don't. these interest rates, there's no way from here to sunday that those rates aren't going to rise and rise a lot over the next three or four years, it may not be this week or next week, but they're going to rise and rise a lot. if you lend to the government, especially long-term, you're going to lose your shirt. so i would not lend to government at all, any government. charles: quick before i let you go then. what are we looking at gdp-wise? are we talking about bumping along here? >> well, of course. there's he no change in policies, charles. how do you expect a different result when you keep doing the same inputs over and over and over again? what we need is a low rate, flat tax, spending restraint. sound money, free trade, minimum regulations and then get the heck out of the way and let the private sector solve its problems, but that's not what we're doing, charles. charles: it's not what we're doing. until we do the right thing, it's not going to change.

>> the blueprint for prosperity never changes and at some point maybe someone in d.c. will learn that. >> i guarantee they will, charles. thank you very much. it's really a hoot being on your show, by the way. >> and i love your optimism, thanks a lot. >> and well, the dow is coming off the biggest weekly slide for this year and now it's within reach of falling below 15,000, and that's a big, big mark, psschologically maybe, but we want to find out how low it can go. and market watcher keith fitz-gerald joining us from portland. last week was the worst week for the year and worst week in almost a year, where are we looking on the down side? how vulnerable are we? >> that's an interesting question, charles. i think the next logical stop if you look at the classic support and resistance level is 760 on the dow. that having been said. i'm expecting relatively flat trading until we figure out what the fed is and isn't going to do. that's key. >> so you're talking about then, i looked at the charts, too, that's a key number and after that.

the 200-day moving average and list listen. we don't like to get too technical. when we get down, selling begets selling and it's a proverbial snowball and we could go further down. >> the key is something called the repo market. not something that people think a lot of. the short-term purchase and sale of government securities. who wants to lend to the government right now. i certainly don't, a lot of investors don't. what happens, they use that stuff overnight to generate liquidity and leverage. if the institutions run out of these two things, then we see the cascading snowballing. if the fed keeps that in control. then we stand a chance of staying above that. >> when does the game of fed printing money and giving it to the federal government. and giving interest and giving back to the fed. when does this shake out and some of the money gets to the viewers watching the show right now? >> when they quit selling mainstream down the river. you know, here is the thing. we're getting ready to have the jackson black hole meeting again

and the fed will run around and con congratulate late everybody. we saved the economy. they didn't, they saved the big banks and middle america is hurting to art's point, big government equals small wallet. so i think it's a fair statement to get out of the way, private business wants to sort it out. they want to fix this stuff. charles: the jackson black hole summit. you get the credit for that one. keith, we appreciate it. now i have the honors of finding 7 early movers. chesapeake after the close on friday, carl icahn increased the stake to almost 10%. the company has been executing and beating the street and earnings estimates have been going up and chesapeake had a rough go, but maybe turned the corner. and therapeutics, the stock is not moving, up a little in the pre-market. another upgrade for kaiser aluminum, to pa buy over at stern ag and the target on this stock is $80 a share. and ryanair, stock was under

some pressure, a documentary, one of the pilots said management does not care about safety. and those are fighting words in airline industry. and they're bouncing back. and jeffries with a buy and they jumped on board, the target 115, to the pharmaceutical, fda approval and they're going to launch a treatment for epilepsy, and take a look, that's had a fantastic news. and this drug, last week, they had good news on it, but there was confusion over the study, stock shot up and came down and this morning making a nice rebound and at the 10:00 hour i'm going to interview the ceo, i like this guy a lot. this could be a monumental drug to help them fight for diabetes. the republicans are fighting obamacare, promising to defund the law as a way to stop it, as a result, the g.o.p. is being labeled the party of no.

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>> all right. we have avenue been open 15 minutes and take a look, down off two points. and a slow start and maybe this one can go uphill. time for the morning gold report. and relatively unchanged down two bucks, still above 1368 per ounce. intel right now the leading stock in the s&p 500, the stock had an upgrade this morning and

you can see it's up over 2%. take a look at facebook. close now back to that ipo price, 38 seems to be the center of gravity, again, this one got an upgrade as well. two big names you know getting upgrades this morning. the republicans doing everything they can to kill obamacare, but the criticism has been that they're not offering alternatives, but congressman tom price says that he does have a better plan and joins us now. congressman, last week, your old colleague newt gingrich said the g.o.p. had quote, zero, zero ideas to replace obamacare. is he wrong? >> well, certainly, he's wrong and i had a conversation with newt or i communicated with newt because he actually cited my plan during the presidential debates last year. the bottom line, you don't have to put washington in charge to solve the health care challenges we've got. hr 2300 is the bill that we've offered that gets folks covered, solves the insurance challenges and saves hundreds of billions of dollars, does it all without putting washington in charge or raising your taxes.

it can be done. it's called patient centered health care and patients and families and doctors making medical decisions not washington d.c. charles: so, representative price, would it be smart then for the party to sort of rally around your plan. i don't know if there are alternatives out there and sort of promote that as much as they promote, you know, these funds and in other words, you know, you're being labeled the party of no, that seems to resonate with the general public. wouldn't it be smarter to go on the offensive with this alternative? >> absolutely. i agree. look, the president continues to get out there and say that the republicans have no plan, when in fact he knows that there are positive solutions that embrace patient centered health care. so i've been trying to get my colleagues in the house and in the senate as well to embrace a plan. it doesn't have to be my plan, but we need to be putting something out there that says, yes, you can get individuals health coverage that they want not that washington forces them to buy and solve the insurance challenges, too big once being portability and preexisting and those are simple to solve and

you don't have to put washington in charge and again, you can save hundreds of billions of dollars and we ought to be doing that positively so american people can see the contrast. president obama wants washington to run your health coverage. we wants patients and families and doctors to run your health care. >> sir, i think you're right with respect to this also being sort of the central battle for the next two election cycles. exactly what kind of a nation will we be. one with the individual boot straps and main street makes a decision or cede everything to the executive branch from main street's rights and that's where it feels like the battle lines are drawn. >> you're right. it's not just true in health care, it's true in the other arenas you've been talking about. who should run the show, should it be the dynamic of the market, economic freedom and individual opportunity and responsibility society or we're going to put washington in charge, the central government in charge of every aspect of our life. if we move in that direction, one can do that, nations have done that, but that doesn't result in more dreams being

realized and the kind of vibrancy of an economy or the kind of health care that people want, that real people want. charles: absolutely. i think you could actually say that history says it never works. before i let you go, i have to ask you, congressman, about the violence in egypt and continues to escalate. should we or should we not stop sending money to egypt? >> no, what we've got to do is define american interests. american interests is make sure that the camp david accord remains adhered to and the suez canal remains open. that's the american interests and that's where we need to be pointing our efforts right now. charles: thank you very much, appreciate it. get your colleagues to push a positive message after alternative plan, that's what the people i think want to hear. i appreciate your time and your plan, by the way. we'll see you soon. >> thanks very much. charles: well, the yankees-red sox rivalry heated up and a-rod the center of the controversy, hit by a pitch in boston and the crowd there cheerrd. this is clear, vigilante justice, even a-rod's own team

doesn't know who to root for. that's next. ♪ bad boy, what you gonna do ♪ ♪ what you gonna do when they come for you ♪

>> well, pc centric intel is the big winner on the dow, j.p. morgan with questionable hiring practices in china. and more drama between the yankees and red sox last night. the embattled yankees slugger was clocked by a hit from ryan dempster. the first three pitches barely missed him and obvious then. and joe girardi comes out yelling and no punches were thrown, but a-rod not phased. later on in the game he hit a roam home run and ignited a massive yankee rally and come from behind and beat the red sox. and the crazy thing, the yankees need a-rod, but the front office is at war with him, fans don't know what to do and everybody else hate him. >> love him or hate him or love to hate him, he is at war with the yankees management and you know, they need him to do battle with the bat, and you're right.

so what we're seeing here, i've never seen a fight like this between a baseball player and the management since reggie jackson got in the televised fight with billy martin on tv in 1977. charles: that was good. and listen they won a lot. they didn't get along and both were two strong personalities, but only, i say only the red sox can make a-rod look like a hero. i mean, how serious. even the new york fans are like, that's the first game throw batteries at him, but that kind of stuff is making him sympathetic and that's weird. >> i totally agree. they give mini bats away it's like arming the contras. the thing is, when you look at data, 0-4 to 12. the yankees had some of the their highest, if not the highest attendance record ever coincides when a-rod was playing for him. either way if it's because of him or not, they have good attendance when he's on the team. charles: he's got good attendance and people love the home run and that's a different

argument when people say let them all have steroids, if somebody had 80 home run season, they'd pile in. >> and so many asterisks. charles: look like a constellation in the record books. is there a savior on the horizon, could it be the smart watch? one of our tech people say yes, that's new on varney, another hour next. right now, 7 years of music is being streamed.

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>> new this hour, the man who knows first hand what it's like to be bullieded by loislerner. mark stuckerberg hacked. how did they post something on the founder's facebook page? we'll talk to the ceo behind a possible diabetes breakthrough in a hailble drug to help you treat the disease. we are fired up about the death watch again. this time, there it goes, we're going to talk about a stock that's actually -- ♪ dodging the grim reaper. the now hour starts right now. ♪ >> all right, a check of the big board, dow jones down, now up a little bit, marking time, 15,000, something of a point, even if it's psych psychologica. i want to talk about breaking

blow 15,000 last week. the jobless claim better than exchted, unfounded. >> up founded. europe is pulling out of the recession, germany, france, shanghai markets going gang busters now against where they have been. i think it's more than just the tapering fears m i think it's also oil hitting the brent. could be at 115 or higher due to libya and egypt, of course, inflationary fears. we see the ten-year note doubling since may at the two year high. it's going up, not good either. >> also, the fed talking about saying maybe the fed at this point, they are irrelevant. the actions can't help more, and it they taper, could be a surrender like they agree. the risk equal to reward. >> we talked about the fed tapering for more than a year. should be priced already in the market. you're right, charles, there's

more to the story than the federal reserve. >> i think so too. i agree with you. thanks a lot. dollar general, what's going on? >> second best performer in the s&p 500, stock's up 2.5%. jpmorgan upped the price target, a healthy premium from $51 giving it an overweight rating. analysts move stocks. one of the reasons they upgraded is because there's a big possible stock buy back over the next several years, and also noting that, the consumer, as we noted, is strained. $general is a good bike. pick. >> you know, lauren, starting with a luxury retailer missing by a wide margin and a dollar store upgraded. go figure. that tells you something about the economy. >> yep. >> thanks a lot. spl sure. >> video game retailer, game stop, got a couple boosts last week, the target was raised, and, of course -- ♪ they have been on death watch

for a while now, -- ♪ we spoke to the cofounder joining the company now. i got to tell you, stocks chug along, my man. >> you're absolutely right. a good year and continues until november, then it hits the peak when the new consul comes out from microsoft and sony, and from there on out, it's in trouble. >> my town, there was a game stop on one site of the highway and the other side. they are both gone and have been for a while. you mentioned death watch, natural to me, but the stock went up. is there a chance to develop an online strategy to keep them viable? >> they tried. they tried buying companies, on line retailers, but they have too much competition in the space. there's a serv steam, which does tremendously well in the space of selling games online, and microsoft and sony do it themselves. why go to a third party to buy the games when you buy directly from the company. >> what are the people missing?

they were like two firms last week that upped the target saying it's going to 58 bucks. >> that's right. consuls do well and people go to game stop to buy them, but once they are out -- >> what about the new games? like the grand theft auto -- what number now? >> up to five now. that comes out in september going to do tremendously well, and x box one and sony playstation four will push game stop, huge numbers in q4, and after that, why go to a store? >> a human announcement from disney infinity where different characters in movies gets to play with each other on a video screen. what -- through xbox, whatever, what's that do to game stop? >> that'll help them, again, a little bit. it's like making sure there's a reason for people go to stores. problem there is you can go to any toy store to buy the toys at

toys "r" us so you are not limited to a video game store. they are so narrowly focused, game stop, they have not built a future for theptions. a strong year, then in trouble. >> the industry itself, i was shocked when my son mentioned grand theft auto over the weekend because he was not talked about video games for a long time. you know, what's happened there? there's always been buzz about the next hot game, and peoples like hollywood. this is grand theft auto 5, you know, any -- is it the lack of originality? what's going on? >> plenty of originality, but the companies that have been there if a while, there's grand theft auto, take 2 interactive, putting out games forever so there's sequels because people love them. you have the originality coming from independent developers, people in the basement making their games on iphones, mobile devices so that's where the originality comes from. >> okay, right, right, like words with friends. >> angry birds, all made by tiny

companies, and now they are a huge deal. >> my wife is in bed at three o'clock in the morning playing a word game. i have to get up in an hour. i need a break. what's going on? >> what does that say about your marriage that your wife plays video games in bed? [laughter] >> all right. seems like that where all the originality has gone, but that's a multibillion dollar industry, and now the kids are becoming adults and have their own money, don't ask parents to go out there. the space is viable, but avoid game stop or ride the wave until november, jump off? >> exactly, that's the time to jump off. it's all digital by then. >> all right. >> tell charles' wife about that. >> i will. >> thanks a lot. well, facebook's ceo falling victim to a hack attack. mark reports that a palestinian hacker posted fake messages on his facebook wall. well, i want to ask you about

that before we let you go. >> sure. >> if he's hacked, anyone can be. >> absolutely. now, the difference here, of course, is he's a big high valued target. if they want to be a hacker and show off skills, they go after mark because, obviously, he's the most visitable person on the planet. >> i -- >> what's that say about facebook they didn't catch the bug at the outset? >> that's why he, by the way, said he did it because he warned them about it, warned him, and he blew them off. >> that's always going to happen. there's going to loopholes. >> this looked easy. >> like the nsa, it's not uncomn or just for social networks. >> i don't understand. we commit more of our personal information, people know everything about it us, and we give it away in hopes it's protected in some way. just a false reality. i mean, just accept that. >> pull the plug. that's if. wipe it off the interpret. that's the only way to be safe. >> what's that do for you? >> trouble then.

>> mark, facebook, this guy goes in, smashes it up. do they respond? plug in that hole? doesn't matter? >> plug the hole, but someone else finds another hole, and they can't respond to everyone. they can't pay hackers a bunch of money every time they find a bug, although, they promise to. a lot of companies, google, facebook, have offering to say, if you come to us, and there's a bug, we'll pay you money, but, yeah, you p can't fix them all. >> maybe mark will take his facebook page down. just kidding. >> real quick, in that space, facebook made a remarkell reversal, sort of, that, you know, reclaiming some of the embarrassment from the ipo scenario. that has room from here? i mean, you know, because it feels like, you know, the street is so nuts, you know, manic-depressive; right? they love you, hate you, and now they love it. stocks made a big move. >> it's all right. i don't think there's tons of upward mobility, though. >> really? >> yeah. >> about where -- >> close. >> anything exciting in the

space? >> in terms of social media? >> yeah. >> i have not heard anything huge and earth shattering. >> the twitter ipo, talking about that, insight on that? >> not yet. >> will be big, though? >> my ears to the grounder, yes. >> bigger than facebook? >> not that big, but big, we'll see. >> all right. we'll see. listen, my man, game stop. >> weapon. >> a lot of people short looking for you. >> just wait for it. >> hope they don't hack you and find your home address. just teasing you. you're right, i agree. see you soon. lauren, intel leading the s&p 500. >> and leading the dow, that's right, charles. stock's up three and a quarter percent now after being done more than 3%. so far in august, analysts, again, piper turning from a bear into a bull on intel. essentially, they raised the stock to neutral from underweight enup to the price target to 10% to 22 bucks a share. >> listen, talk about

blackberry, anyone turning bullish there? >> well, it seems not. here's the latest there. jefferies cut the price target on blackberry 215 from 18. the stock's down two and a half percent. >> all right. thank you very much, lauren. >> sure. >> now, was this the president's idea of maximum pain? government travel budgets cut by 30% this year, and now managers have to make difficult decisions whom to send to which conference and where to send them and for how long. agency officials say they can't conduct business like this, and they are embarrassed now. embarrassment is abroad as well, liz. article in the new york new york -- "new york times" about this. >> yeah, big article. >> maximum pain designed, and sequestering comes through the government, decides where to cut, and people felt the white house deliberately picked areas to resinate with the public, the easter egg hunt, white house tours, things like that. >> right, and at the same time,

avoiding furloughs. that line is big out there. the biggest government unions told the biggest squawkers about sequestering, meaning education and transportation, homeland security, the government union showed them ways to avoid those furloughs of workers, and instead cut the fat in the organization. >> i find it ironic they complain about the very stuff people stuff say you should be cutting, unnecessary travel, conferences, should you take first class, i mean, this is what we want, what the american people actually wanted to get with this. you know, the fact is that the government -- these not tough decisions, just they say, we have to make two or three less trips than normally made on a taxpayers' dime. >> listen, if it's your job, the conference, i think guys think, you know, i want to keep my job. >> i hear ya. surprise, surprise, soda is linked to behavior problems in younger kids. after the break, the doctor's in. ♪

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>> did you see this? a city in japan had its 500th volcano eruption yesterday spews smoke and ash surrounding the entire city causing delays, poor visibility, and residents wore raincoats and face masks to clear the streets. it lasted for 50 minutes. look at that. absolutely amazing. what's interesting is there were no reported injuries. you know, they are used to that there, but just mother nature, dramatic. back to the markets, though, and i like to talk about this list. i mentioned it last week, and now is the time to put together a list of stocks to buy on the pull back. i think part of the list has to be zillow. i've not talked about it a lot, but there's an acquisition today, down, ahead of itself, which is fine. in the lower 80s, pull the trigger, again, in it a few times, the share extraordinarily successful, one name everyone should have on the watch list. well, you know what? we hear about soda linked to

obesity, but what about violence? the more soda kids consume, the more aggressive they become. dr. mark joining us now. you know, doctor, i never thought about foods like this rage, a soda rage? >> there's controversy about this, but the study is convincing. journal of pediatrics, 3 # ,000 families surveyed, and 43% age of kids at two drinks a soda a day. >> a 2 #-year-old? >> a 2-year-old kid drinking a soda a day. there was a market increase in aggressiveness and inattentiveness among kids at the age of five, actually, the average, when they had a soda a day. the more they had, the more unattentive and aggressive. before, it was correlated with adolescents. this is not proof that if you drink a soda you attack someone. it's not proof. it's called an association. the more soda you drink, the more aggressive.

i agree with this. >> layering on the obesity challenge already that soda presents. >> great point. there's an obesity epidemic because of soda, the sugar, high fructose corn syrup and caffeine. >> a lot of schools serve soda, not to 5-year-olds, but junior high and high schools, there's machines, and still. >> i'm a fan of celtzer. they like the fizz. rid the sugar. >> it's more than four a day for a child, then you're going to see them fighting with their play mates or breaking toys; right? >> that's more convincing. the more soda there is, likely violence erupts. >> wow. >> nuts, wow. i want to talk to you also about smart phones and our eyesight. just not good. it's just not a good combination. >> 30 -- smart fifteen's been around since 1997 and computer screens and big problem is we are way too close to them. you read 16 inches, here at

eight inchings with the splart phones. a study says there's a 35% increase in problems with nearsightedness related to this. he can't prove it. the study author can't prove it it's the smart phones that caused the increase in near nearsightedness, but eye experts always believe when you don't focus properly or have eyestrain, you are likely to be nearsighted. again, it's not proof. >> an explosive charge, though. this is not a small portion in the population, ultimately, 50% of us could have eyesight impacted from use of smart phones. >> 50% is where it's going, charles. you know something else? other studies show that sunlight decreases the risk of being nearsighted. you're inside, huddled over the smart phone, you know, watching a movie, watch people watch movies on these things, like this. i mean, i don't think it's healthy. >> is it because the human eye adjusts rapidly to sunlight than, you know, electronic light? >> i think that's right. i think the more you have to

adjust, the more strain there is, and the more you don't watch at the right angle or the right distance, the more strain there is. the smaller the thing is, the smaller the print, i'm an ipad fan, not an iphone fan. do what you want regardless of what i say. >> you can say you would lose sight, cancer, radiation, they do not give it up. >> i'm not saying that. >> i know you're not, but it's been tossed out there, not detouring the growth or acceptance of the devices at all. throw in blindness, what the heck, you know, people love the gadgets. >> the eyeglass industry will have a field day and put a phone on a pair of eyeglasses. >> you know about the google glass; right? good to see you, preliminary -- appreciate it. a crash, talking to a bear getting reaction to this. >> dow's going to go to 16,000 roughly by january and then crash in the next few years down

to 5800 or 6,000. a crash is a four letter word in the stock market. how much of a crash are you looking at? what's the worst case scenario? >> gold goes up to 1525 and crashes to 700 or 740. >> your target for the dow, 5,000? >> yes. >> by mid-2015? 5,000? that's chaos. that's, like, what the heck, we're talking about the united states tumbling. >> and the s&p goes to 1740 down to 500.

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>> time now for a check in the market. yes, the dow opened today, okay? it's unchanged, but it did open, and trading at a tight range right nowment we're talking about a lot of retailers reporting lower profits and weak forecasts, and that's been driving the market lower, the economy, overall, reflection of that, and, lauren, you have two retail winners? >> we do. ross stores and best buy, both up one and a half percent right now. ross stores competes with t.j. maxx, upgraded at morgan stanley, and, also an increase in the price target up to 77, and in terms of best buy, they got an increased price target to 36 from 29. they report this week. best buy reports tomorrow and ross reports thursday, charles.

>> making upgrades amazing. this is a gutsy call when retailers are hit saying i like two of them before earnings report. a good call, thanks a lot. >> good to see you. >> let's stay with the markets now. big predictions from market watchers friday. i think we -- do we have the sound there? okay. well, i want to bring in market bear alex, a bear for a long time, in part because of the money printing and now you say that the printing doesn't work anymore, hence the market sells off. you're not necessarily looking for a harry dent catastrophic end of the world sell off? >> no, i don't think so. thanks, charles, and elizabeth. the economy is getting bet every, and we focus on fundamental analysis and see the market is actually on the right track in terms of elevations. we could be over extended in a short time, but a medium to long term, it's in the right place. >> the market pullback then is

associated with what, then? not a reflection of the u.s. economy, but associated with what? >> i think it's what we did the past couple years, reflective of what the chairman says. >> knee jerk reaction to the federal reserve without any sort of connection to the true fundamentals because you think the u.s. economy's coming out of it? >> absolutely. i think we -- i do think that we'll have some kind of a correction, but, as you said earlier in the morning, we already been priced in. >> correction down to what level? >> hard for me to tell. i don't have a crystal ball, but i -- i really don't think -- >> come on, 5%? 10%? >> i don't it, but it could be. >> 5%? >> correction means 10%. >> i don't think it's that level of level. at the end of the year, the market ends up where they are now. we are volatilities going up, but interestingly enough, the correlations -- >> you are positive it's just a hickup? >> absolutely, that's my sense. >> what sectors do you like right here? >> we have been long for a

couple months now, financial sector, industrials, discretionary sector, and health care. again, based on fundmental analysis, despite, you know, ups and downs, they perform quite well. >> the theme of the show and theme this week in the market is retail. retail last week, disappointed, horrible outlooks, a bunch reporting this week. one firm put a buy on two of them, and you echo the same thing? you don't think the consumers' tapped out in >> i agree with that. there's a lot of talk with the discretion overvalued and becoming dangerous. i think that is correct in the near term. both the summers and companies react to potential fear, said tapering or potential for tapering, not necessarily they are going to do it. it is going to be hit, again, in the near term, but fundamentally, a part-time job is better than no job. >> listen, i hear ya. alex, you're no longer a roaring bear, but looking for a short hiccup and than an opportunist.

>> please do. >> you got it. okay. here's a question for you guys. can smart watches save the tech industry? after the break, our resident tech watcher says the answer's absolutely yes and the market's about to heat up big time. ♪ ♪ ♪

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♪ >> well, tech stocks taking a tumble as of late. low sales, bad earnings, the poorest performance sectors recently, but could smart watches be the saving grace? foxnews.com, science and technology editor, jeremy cap lain says, yes. they say it's corny, not a savior, just a curiosity item. you say, no, they could be more than that. >> i think dick tracy is a selling point. dying for this. >> i like the dick tracy thing. my sop never heard of him so we have a sales pitch there. >> give me the car, a phone, talk on my shoe, i want all of it. >> yeah, you're right. confusing my tech stuff. why, why now all the sudden? why should we all of the sudden be excited about smart watches? >> at the moment right now where

every single big tech company talks about it, apple, samsung, sony, weird companies like pebbles, a joint -- giant force, and everyone is looking at this. will be the next big revolution like when smart phones came along and transformed the entire industry. >> or another republican we could have a ups truck or bus hit because it distracts us. you're wearing a watch? >> i am. >> a phone watch; right? >> this connecting -- this is from i'm watch, one of the first ones to come out. it's a link to the smart phone. it's a little bit big. i don't know if you see it on camera, it's big, clunky, a giant screen. >> how much? >> $200. we're at the point where all companies have prototypes, great pictures of these incredibly cool looking things. if they come out -- >> tell me about them. i don't know what you're talking about. >> it's basically, when you use your smart phone, what you are doing is a handful of glanceble

bits of information, the scores, looking at facebook stock, this is me, this is what i look at, but it's a similar stuff; right? e-mail, text message -- >> you're a red sox fan? timeout, what? >> oh, yeah. >> red sox fan? >> not in favor of what happened last night. >> don't endorse that stuff. >> all that information is easily transferred. >> as revolutionary to technology as the smart phone and as the tablet has been? >> i would say, yes. if you think about something that people buy for $200, not an unreasonable amount of money, but if it's the must-have thing and you sell a hundred thousand, a million, two million, ten million, that could -- >> does this dove tail into a larger category? wearable computers? google glass, the watch, and, you know, hearing of other things. ultimately, are we putting on, like, a suit, and it's all connected, and, you know, is that where we are going? >> that's what i'd like. i'm ready.

sign me up. >> made by a 3-d printer. you know, listen, how -- samsung example, and the idea is out there since 1999, and it's not caught on; right? for a reason. i'm not sure why. >> because they are ugly. the ones i've seen, what i'm wearing now is ugly. i'm not going to lie. >> for mungsalty than that? you know, i mean, does it have to be pleasing if it does a bunch of wild things? >> no, i think it's pure asthetics. we need glass, thin thing over the risk, show it off, and everyone says, i got to have one. >> i remember when apple was making that transition, you know, after the era, and people on wall street said it's no longer a tech company, a design company. leave the stock along. they were wrong, but the design and functionality followed. shifting gears here. a big story is mark, you know, someone hacked his account. i thought he was unhackble.

any grand implications for the company or for us as users of social media? >> i don't think it's a big deal, just one of many little tiny security flaws found. >> tiny? tiny? >> they found a way to post basically only your friend should be pose on the wall, and he found a way who is not your friend to post on your wall. it's embarrassing, but go past it. >> what about the idea, though, that this guy contacted facebook? saying, listen, you have a problem, there's a bug, and they ignored him. now, maybe as a facebook user, knowing the company could have prevented this or if something like this, at least, maybe get riled up about that? >> oh, yeah, absolutely. the company is getting too big for its brichs. if you're pointed out a familiar saying this is how it fix it, and theyic forit, that's a little bit -- i don't know, they should have done better there. >> well, leaving it there. >> there you did. >> the dick tracy watch coming, the adam's shoe coming.

exciting stuff. appreciate it. didn't know about the red sox thing, but i won't hold it against you. could be the most promising news for people with diabetes, and i'm talking the i insulin drug, but after failing fda trials two times, will it hit the market? after the break, we have the ceo of the company that makes the drug, and he is saying, well, yes, it will. ♪ right now, 7 years of music is being streamed.

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it's called hp moonshot. and it's giving the internet the room it needs to grow. this&is gonna be big. hp moonshot. it's time to build a better enterprise. together. >> turns out "the butler" did it, the pr blitz shot the movie to the top spot bringing in $25 million, a little less than thought, but still beating out ashton's biopick, and jim carrey, big budget, super hero film, carrey shot himself in the foot refusing to promote the movie because of the violence, and when he came around, it was too late. wildfires in idaho threatens to destroy more than 10,000 home, and more than 1200 firefighters on the scene of the fire, and it's already spread to more than 126,000 acres. in a violent weekend in egypt, more than 900 people dead since

the fighting started four days ago, and among them, 24 egyptian police officers executed by militants military style. up next, a new form of i insulin that could be a major game changer for people with diabetes. [ male announcer ] you've reached the age where you don't back down from a challenge. this is the age of knowing how to make things happen. so, why let erectile dysfunction get in your way? talk to your doctor about viagra. 20 million men already have. ask your doctor if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain; it may cause an unsafe drop in blood pressure. side effects include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. stop taking viagra and call your doctor right away if you experience a sudden decrease or loss in vision or hearing. this is the age of taking action. viagra. talk to your doctor.

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automobiles, a buzz for the stock, but knows their core streaming radio business has crossed break even so more than 4% gain for pandora, and other stocks, i, this tel, apple, facebook leading the way, out performing the dow an s&p by a large margin. >> recording artists aren't paid, but we are. subscribers. thanks a lot. appreciate it. another stock, listen, this is on your watch list, these are names you want to probably look at on a pull back, travel zooen an amazing earnings report not long ago, a huge move to the upside. i like it a lot, always did like it a lot. it's in buying range now, no sense of urgency to pick up anything, but use the down time to create a list of stocks to buy on weabness. let's talk about a new way to manage diabetes that could be on the market soon. a fast agenting i insulin powder delivered by an inhalerment mankind corporation developed the drug, and it's promising to

refile an fda approval for this year, a new drug application this year. the chairman joining us now. i got to tell you, alfred, i'm a big fan of yours, just as a businessman, extraordinary success. i learn about your company a few years ago, did a research report on a rival that had not had your success, but people say you barked up the wrong tree and will not work. you proving them wrong? >> they are crazy. of course it works. >> well, but the problem, you had serious problems with this, and even last week, your company has good news on a trial, and the stock shoots up, and everyone sort of says, well, the trial had problems itself so you have toed -- to admit it's a bumpy ride so far >> yes, it is. that's absolutely true. there's manipulation with the stock. >> forgetting about the stock, talk about the idea of inhaling insulin. i mean, this is human. you know, people don't have to,

you know, do anything that's more invasive than inhailing it, but for a long time, they said this would scar the lungs, and therefore, the benefits gist didn't add up to the risk. >> well, the problem in the earlier efforts to try to do this is that the products were not very convenient, but more importantly, the kinetics were wrong. they were not clinically as good as the injected insulins you have today. >> you know, alfred, i read where you are the 200th richest man in america, extraordinary career. why do you keep doing this? you put your own money into the company. why keep at it? what drives you on this stuff? >> well, my commitment is to address the greatest problem that faces the world today in health care, and that's diabetes. there's -- there's about 400 million people in the world with diabetes, and then almost a half million more with what they call pre-diabetes, really an earlier

stage of the same problem. >> this inhealer -- >> we have to find a solution. sorry. >> so the next step, then, i understand looking at your website, you got to thinking now go for the new drug application, is that next? >> yes, that'll be filed. we're expecting to do that in the early part of the fourth quarter. said publicly we expect it in the first half of october. >> all right. alfred, watching you for a long time. the stock spiked last week, wanted you on the show to share your story for the audience. we are rooting for you. thanks for coming on this morning. >> thank you very much. >> okay, thanks. well, it's the top dating website for sure gay daddies and sugar babies, and schoolteachers are flocking to it. that's next. ♪

♪

♪ >> all right. so we know times are tough, and teachers, well, they are looking for options to make ends meet. what about this?

seekingarrangement.com is an online website for sugar babies, and 41,000 schoolteachers join to find wealthy older men for a mutually beneficial relationship and getting a second job like the old days is out of the question right now. >> yeah, and, you know, this seeking arrangements looks like they are looking for publicity because there's a press release about this. the fact is teachers get paid, what, average 55,000 a year? many less. they also spend their own money on office supplies, but they are saying, according to the survey, that the biggest -- the areas for sugar teachers are philadelphia, miami, los angeles, clark county, and nevada, and also new york city. >> i mean, really, think about this for a moment, though. like, you know, teachers teach for the love of it. no one went into teaching to be rich. 40,000 looking for a sugar daddy. it's not like making ends meet. hook up with a new ride or --

>> we don't know what sugar male teachers are doing either. dpl new york city, the teachers on average make $75,000 a year. a lot of people say that's not bad. money, you know, to your point, number five on the list, so, you know, is it just publicity or something a little bit more? >> listen, i'll tell you, there's a lot to say there's wrong about the education system, teachers not in it for teaching. i asked teachers in the family, and they say, for example, teachers say, hey, where's my paid vacation time? that's the focus rather than the kids. that's a problem. the survey highlights they are underpaid and do more to help the kids, and this is what they are doing in the off hours? i mean, this website is saying they are -- the sugar teachers want an extra three grand a month; right? >> that's what they want? like, whatever, perks, benefits, whatever? extra three grand? taking you into six figure territory in new york. >> right. >> the point brought up is important. i did read last week where the

average teacher spends hundreds of dollars out of his or her own pockets for school supplies. i guess, you know, that's the other dynamic to the story. >> yeah, that's right. you know, listen, i don't -- we have yet to hear the teacher's unions coming out commenting on this and getting reaction as soon as we hear it, but, you know, radio silence on that end right now. >> clark county, that's las vegas. >> right. >> they are ranked in two surveys as the worst schools in the country. you know, i think now if there is, like, a lot of teachers messing around with this stuff and not serving the kids, that would be an indictment, but not on all teachers, but specifically that area. it's like something, you know, i like to delve deeper into this. >> i'm sure the government wants to screen them because you could see more social networks searching by the board of ed into some of these teachers' activities. >> when you talk about these teachers in it for money, it's my experience, i don't know, maybe your family talked about this, they go in initially

thinking, you know, i want to serve, help the kids, and some say it's like a union mentality, a culture taking you away from caring about the kids as much as caring about the benefits, time off, vacations, that kind of stuff. >> absolutely right, charles, and, you know what? my god jpmorgan daughter, my niece, a charter schoolteacher in manhattan trying to build charter schools in abandoned buildings, and they are getting resistance and pushback from the teachers' union, but my niece gets, you know, bonuses and merit pay if she does well by her students. >> charter schools have been absolutely phenomenal and teach for america teachers who work in them are absolutely the best. well, you know, it's being called the song of the summer. i think over 4 million copies sold, robin thicke's "blurred lines," but he's accused of copying it. after the break, we'll play both songs, and you will be the judge. ♪

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ally bank. your money needs an ally. ♪ charles: robin thick finally sued with "blurred lines." you be the judge. ♪ charles: i know you want to get

up and do the robot when you hear that. what do you think? >> it is the same song. charles: it will end up being a really ugly legal battle. >> yes. it will be based on the preponderance of the evidence. charles: 1977, we are in the house chilling out. blackout. oh, man. what a night.

my mother would not let me go. >> how did you feel about that? >> i am happy now. >> your mother did a great job. charles: everyone is given motherly advice this morning. they all sort of say something is wrong with the bond markets. we have seen him missing things happen in the bond market. >> to almost double since bag, that is a huge leap. watch out. the sequestration did work. you need to cut spending. if you do not, it will get out

of control. charles: it feels like todd yield baseline the fed. >> you and i were talking about this. if the fed papers, will there be a split. charles: if they cannot go to the fat, where else will they get cash from? i am being devils advocate here.

>> a way to keep employment, or you know, hide. charles: you are pro- woman. who do you think? >> i am saying possibly yell and. charles: you are saying that because she is extremely qualified, nothing to do with gender. >> the word is out there that she has already been a better forecaster. charles: we have covered a lot already today. all right. passing it over to you. dagen, the market is up six points. dagen: we heard you. we were playing that song while

you were discussing. we were having our own in studio analysis of it. i do not think you could win a lawsuit in court. that is my guess. charles: take it away. not happy with the detroit bankruptcy filing. they need to speak up today or hold their peace. holding back financial aid to egypt. do we need to cut off all of the money going to that country? a raspberry instead of blackberry. the movie about steve jobs came in second at the box office over the weekend. listen to this. some wood off to lease themselves rather than till death do us part.